Previously, the bank was the largest single holder of the bonds. The bank reported it held a 60% share in the entire 2030s worth RUB496.2bn (€7.14bn) at the end of 2016.

However, according to Otkrytie’s quarterly report the holding has fallen by about 85% to RUB85.4bn (€1.2bn equivalent) worth of the Russian sovereign Eurobonds. The bank appears to have been selling the bonds all year: the report also said the holdings in the 2030s declined from RUB171bn (€2.5bn) at the start of 2017 to RUB 121bn (€1.7bn) as of 1 April 2017.

“Although it is impossible to estimate the completeness of the 2030s ownership, we believe that the Russian banks and companies hold the lion’s share of the 2030s,” Raiffeisen Bank said in a note.

These bonds are in play, as they may be included in a Ministry of Finance plan to swap $4bn of sovereign debt later this year for longer maturities. The ministry is getting ready to swap the debt and buy back the outstanding notes due 2018, 2028 and 2030, reported Raiffeisen. The swap amount would be capped at $4bn by the 2017 budget law.

“Although Russia gave no timeframe for the swap, we believe that the transaction will be launched in the first half of September. We expect the swap to remove the issues with poor liquidity and/or shorter duration and to add medium-term to long-term new bonds which could positive for the market liquidity and sovereign risk pricing,” Raiffeisen said.

The problems with Otkritie emerged at the beginning of the month when bne IntelliNews sources said the bank was “in trouble” and that commercial banks were cutting their exposure to it.

As concerns build, Otkritie has also seen a major outflow of assets. The bank’s non-consolidated assets downsized by 12% in July 2017 amid significant fund outflows. According to local GAAP figures, during the month the bank lost RUB320bn ($5.7bn) of corporate and RUB36bn of retail savings, which together accounted for 23% of total deposits as of 1 July 2017. Additional RUB262bn of funds were withdrawn by banks. In total Otkritie has lost $10.4bn in assets in recent months.

These outflows were partially refinanced by means of the CBR repo facilities, says Raiffeisen, where the bank was the major consumer of RUB repo line.

According to the bank the deposit outflows were partially planned and related to the recent downgrade to BBB-(RU) rating assigned by Russia’s new domestic rating agency ACRA, which cuts the bank off from certain sources of funding including deposits of MinFin and non-state pension funds.

Meanwhile, the rest of the withdrawals were caused by the informational attack on the entity, according to the bank’s representative.

An Alfa Capital analyst caused a storm in the market this week with a note to clients suggesting that several major commercial banks, including Otkritie but also mentioning Promsvyazbank and B&N Bank, were in serious trouble and may need to be bailed out before the end of this year. The author of the report has since been reprimanded and faces possible disciplinary action, but the tension in the bank sector is now high.

So far no one is predicting a bank crisis. Otkritie is formally a bank of “strategic importance,” and as such should be helped by the CBR.

As of 1 August 2017, Otkritie was in compliance with regulatory liquidity requirements, having the N2 ratio (instant liquidity) at 74% (vs 15% minimum), N3 ratio (current liquidity) at 186% (50% minimum) and N26 (the LCR as adopted by the CBR) at 97% (80% minimum).

But it seems that the CBR is not taking any chances, as it has just increased the funds available via its repo facility to RUB 676bn as of August 16.

The board of Ukraine’s main donor, the International Monetary Fund (IMF) signed off on the badly needed $3.9bn Stand by agreement (SBA) at a meeting on December 18.

Average bribe in Russia is estimated by the Public Prosecution Service at RUB609,000 ($9,000), while the total amount of uncovered bribes in January-September 2018 stood at RUB1.8bn ($26.7mn), as reported by Vedomosti daily.

Analysts think country is undergoing a much harder landing than many people expected. Credit crunch seen morphing from complete shutdown in FX-denominated lending to suppression of TRY lending.

Russia's e-commerce market in 2018 could reach RUB1.5 trillion ($22.8bn), according to the estimates by Data Insight cited by Vedomosti daily on December 17. Sales in Russian online stores are expected to increase by 19% to RUB1.15 trillion

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